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If you tune into the mainstream financial news, you’re probably hearing a mixed bag of reports when it comes to the state of the consumer. Some will proclaim that everything is awesome, while others say a Great Depression is imminent.

I would take it a step further and say the doom and gloom is even worse online. When reading these types of reports, be sure to ask yourself ‘qui bono?’ or, “who benefits?”

The thing with economic data is that it can be manipulated to suit virtually anyone’s desired narrative. It’s why I prefer to focus on the only metric that pays - price. And after last week’s performance, I think you’ll be intrigued as to the new performance rankings amongst the sectors…

Just Accept It: The Market Knows Best

If you catch my daily sessions here at TheoTrade, you hear me talk about how time is more important than money. We also talk about mindset a lot, and the importance of balancing the opposing ideas of abundance and scarcity. Here’s a little secret - meditating upon those greatly helps with managing the emotions of fear and greed.

In any event, we’ve seen the consumer discretionary (XLY) sector absolutely dominate the rest of the market over the past couple months. In fact, it’s now the strongest performing sector going back to the start of Q2 2024.

Keep this in mind when people proclaim that credit card balances and debts are out of control. I’m not saying they’re wrong - I’m just saying there’s more nuance to the discussion than just looking at raw numbers.

Communications also continues to perform well, as it’s being driven by a handful of internet and streaming names that are getting more and more market share.

Overall, this is a bullish tape. So long as XLY continues to lead the way it is, it’s hard to sit here, be bearish, and scream about an imminent market crash. Of course, anything is possible, but in trading, we must focus on probabilities above all else.

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